Real Estate is one of the industries that is being directly and badly hit by the economic recession and health problems that arise from the pandemic. Economies of nations all over the globe is currently being devastated by the coronavirus. Many countries are trying to balance health and economic interests, which hit every industry.
Property sales in the UK were down during the first months of the pandemic but in the last quarter of 2020, the situation improved. Nowadays, there has already been signs that the situation can lead to higher confidence in real estate investing.
Ever since, real estate is a much safer investment during crisis because it is more stable than other forms of investment. Based in history, real estate is stable in the long-term, unlike stocks which is more volatile in times of an economic crisis. It is also a physical asset that you can actually use. Yes, its overall value might depreciate, but you’ll still be left with a physical asset and that makes the real estate a much safer investment option.
In the 2008 financial crisis, most real estate markets fell between 20% – 25%, including the UK at 20%. However, stocks fell much more rapidly in just a few weeks and didn’t recover quickly.
In today’s situation, it’s hard to predict how the real estate market will look like in the future because of the quarantine measures and health protocols implemented by different nations around the world, but as countries begin to inoculate vaccines to their citizens, the economy – although likely to be sluggish – is expected to start rolling and people can begin spending money again.
This is a very extraordinary time, almost everything is uncertain but we can use market reactions to previous pandemics – SARS and H1N1 – as indicators for the future. The real estate market has been volatile during that period but stabilized within three to six months in each case.
For people with enough resources, it is not hard to gamble in the real estate industry especially when looking to mortgage a property as interest rates had fall. Refinance rates and those for home purchases trended lower in 2020, and are still ultra-low in 2021. The 30-year mortgage rate averaged 2.91% in January, down from 2.93% in December. These prove that the real estate remains relatively stable and will continue to be one of the best places to invest in. Take advantage of sub-3% rates now while they are still around.
If you are in the mood for real estate investment, keep this handy online tool with you. This is a free online mortgage calculator to help you calculate and compare quickly the different investment with different terms and fluctuating interest rates. The calculator shows the results for the full monthly payment and amount of interest of your chosen property, as well as the total interest payable, your total loan payments for your chosen term, and the total cost of your mortgage.
A good place to invest is where the property prices for sale go down and where there is low interest mortgage rates. You can be sure to receive solid returns on your investment from those places because of safer and low-risk investments. Banks are also expected to significantly reduce their financing of new developments, opening opportunities for alternative financiers to fund properties. Looking at the opportunities in the property market today, it is indeed, still a wise move to invest in real estate.